NEW YORK, Oct. 06, 2015 (GLOBE NEWSWIRE) — Morgan & Morgan announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of purchasers of Fifth Street Finance Corp. (“FSC” or the “Company”) (Nasdaq:FSC) securities from July 7, 2014 through February 6, 2015, inclusive (the “Class Period”). The lawsuit seeks to recover damages for FSC investors under the federal securities laws.
If you purchased FSC securities during the Class Period, you may, no later than November 30, 2015, request that the Court appoint you lead plaintiff of the proposed class. A lead plaintiff is a representative party that acts on behalf of all class members in directing the litigation. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
If you want more information about the FSC Securities Class Action, contact Morgan & Morgan at 1(800) 732-5200 or email firstname.lastname@example.org.
According to the Complaint, on February 9, 2015, Fifth Street reported its fiscal results for the quarter ended December 31, 2014 – the same quarter in which Defendants conducted the Fifth Street Asset Management (“FSAM”) IPO. Fifth Street revealed that, around the time its executives were taking FSAM public, it had moved $106 million worth of investments to non-accrual status with an additional $17 million likely to be designated non-accrual in the subsequent quarter, which together constituted about 5% of the Company’s entire debt investment portfolio on a cost basis. The Company also revealed that, even though the total assets of Fifth Street’s investment portfolio had continued to increase to nearly $3 billion by quarter end, the net investment income received by the Company had actually decreased by 6% compared to the prior quarter. And, despite having announced a 10% dividend increase only four months before taking FSAM public, Fifth Street declared that it would issue zero dividends for February 2015, while decreasing future dividend payments by more than 30% as part of a more “conservative” dividend policy.
Following this news, the price of FSC common stock fell $1.27 per share, a decline of nearly 15%, to close at $7.22 per share on February 9, 2015.
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